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Thursday preview: Brexit, Severn Trent, Tullow Oil

updated: 21 November 2018 at 4:53pm Author: Alexander Bueso

(Sharecast News) - The market spotlight on Thursday will be on the headlines around the results of the Prime Minister's visit to Brussels and her talks with European Commission chief, Jean-Claude Juncker, regarding the UK's long-term partnership agreement with the bloc.Nevertheless, barring surprises, trading volumes in financial markets around the world should be light given the absence of US traders on account of the Thanksgiving Day holiday.

No major economic reports are scheduled for release in the UK or US, while across the Channel the main risk event will be the release of the minutes of the European Central Bank's last policy meeting, at 1230 GMT.

Further afield, policymakers at South Africa's central bank are expected to meet to decide on interest rates.

Utility Severn Trent and Tullow Oil are among the companies which are set to release results in the UK on Wednesday.

For Severn, analysts at Deutsche Bank were forecasting a 2% rise in interim profits before interest and tax to £295m and of 7% in its profits before tax to £192m as net interest costs drop 5% to -£105m.

The water company's dividend per share was also seen increasing, by 8% to £35.2m, in-line with the company's 4% plus RPI inflation target.

Net debt meanwhile was seen rising from last year's £5.1bn to £5.5bn.

In the case of Tullow, which is set to hold its first Capital Markets Day since 2014, Numis's Thomas Martin expected the focus to be on the oil explorer's reinvestment opportunities and on its East African development projects.

"[The CMD] coincides with what is effectively a return to business as normal. The business is now being run for the benefit of shareholders, following a period during which the strategy was dictated by the high levels of debt," Martin said.

Martin's forecasts were calling for an increase in the outfit's production from roughly 92,000 barrels of oil equivalent per day in 2018 to about 100,000 boepd in 2019, with further growth seen resuming in 2022 as the East African projects come onstream.

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